Alberta cuts budget deficit outlook as oil prices rebound

TORONTO (Reuters) - The Alberta government on Friday lowered its 2018-2019 budget deficit projection by C$1 billion ($765 million) as higher oil prices boosted revenue for the Canadian energy-producing province.

FILE PHOTO - Alberta's Minister of Finance Joe Ceci addresses the media before a meeting of Canada's Provincial Finance Ministers in Ottawa, Canada December 21, 2015. REUTERS/Blair Gable

The 2018-19 deficit outlook fell to C$7.8 billion, compared with C$8.8 billion projected in March, the government said in a statement. The 2018-19 fiscal year ends on March 31.

Revenue is forecast to reach C$49.1 billion ($37.91 billion), 2.5 percent higher than the budget projection made in March. Borrowing estimates also fell, due in part to the smaller deficit.

Alberta, home to some of Canada’s biggest oil and gas companies, was hit hard by the selloff in oil prices that began in 2014, triggering a major industry downturn. In the last few years, global energy players have been pulling back from Canada, while oil producers have cut costs and laid off employees.

But Alberta’s energy-dependent economy has benefited from a recent rebound in oil prices, which has translated into improved financial results from the energy producers.

The province raised its real GDP forecast for 2019 to 2.7 percent, from 2.5 percent earlier.

“I am pleased with these results. Jobs are up. The economy is growing. And the deficit is down,” Finance Minister Joe Ceci said in a statement.

The forecasts come a day after a Canadian court overturned approval of the Trans Mountain oil pipeline expansion. The court said in a ruling that Ottawa failed to adequately consider aboriginal concerns.

That court decision does not affect the government’s finances for the 2018-19 fiscal year, but is a negative for Alberta’s economy, the Alberta government said.

($1 = 1.3072 Canadian dollars)

Reporting by John Tilak; Editing by Bill Berkrot